Some key reasons why you might be on the lookout for financial management software business could be:
a) Scaling up from a small to a medium business
b) Moving from an offline (desktop-based) system to a cloud-based system
c) Expanding your business geographically
d) Expanding into a different product/service market
Whatever your reasons may be, here are a few pointers that every technology business should bear in mind when choosing a financial management software:
1. Clear visibility of your company’s finances
Whatever software you opt for, there has to be an unbiased view of the cash flow within your company. The software should enable those in charge to have a clear eye on the entire cash flow situation across all the processes of the company. Any software that helps you identify erroneous expenses or expenses made unnecessarily is a software that helps you make intelligent business decisions. For technology businesses, it is vital that the software you adopt helps you stay vigilant on unnecessary human resources, infrastructure or operational expenses.
2. Online or offline
Ideally, since you are a technology business, it is vital to understand how your business functions. Is it geographically split? Are processes managed by different teams in different locations? Would you profit by accessing your financial data from anywhere across the world? Do you need a solution for a very high number of transactions? Does your business require synchronous data across multiple databases? For any of the reasons mentioned here, you could benefit from a cloud-based financial management system. The difference between an offline and online system essentially is: an offline system functions locally, at a single geographical location and on a specific network. An online system will enable you to access your data from anywhere, anytime at a click of a button.
3. Data Security
Investigate with the service provider how and where the data is stored. You should ask where the servers are located, are they in possession of their own servers, and whether they have a secure server.
4. Selection of Features
Make a list of all the features you need. What should your system do for your businesses? Some important features for a software technology business would be:
• Generate invoices
• Track expenses for infrastructure (computers – rented or bought, space to work out of, software for programming, etc.)
• Manage taxes
• View accounts payable and receivable
• Manage payroll
There are many more features that you might need for your business. Ensure you have an exhaustive list before you decide on which one to go for.
Avoid financial management software that needs you to invest too much in training costs or separate hiring. Whether you are the business owner and the person who is going to manage the software or you have hired an accountant to do so, either way, the software has to be easy to understand, manage, and to derive information from. A software business can be a very resource-intensive business; the best way out might be to completely outsource this function, so you can stay focused on your business.
If your business plan has factored in expansion for your technology business, then make sure you do the same with your financial software. Are you expecting to increase your hires, multiply across different geographies or even experiment with new product development? How flexible is your software to adapt to your internal changes? There is always a possibility that you might need to change to a different subscription level and, thus, incur unforeseen costs. Work your way through the inclusions of the software offering.
7. How much can you spend on the software?
Budgets are always a constraint, so being able to compare features of different accounting software helps you make an educated decision. The current market has software across all spectrums with features that your business may or may not need. It is vital to stay within the budget and yet get what you want from the software.
8. Don’t forget the demo
Before taking any final decision on the software, your finance team, or the team member who is in charge of managing your financial department should request a demo and go through the entire feature list. It is advisable to spend some time in understanding the system to comprehend the simplicity and ease of use. The demo also helps you look at what the software has to offer and features that you may or may not use.